C211 (Global Economics for Managers) TEST
QUESTIONS AND ANSWERS WESTERN
GOVERNORS UNIVERSITY.
What are two supportive pillars for an informal institution?
Correct Answer -Cognitive and normative
What are two supportive pillars for a formal institution?
Correct Answer -Coercive and regulatory
Which condition applies when a competitive firm decides to temporarily
shut down?
Correct Answer -Average variable costs are above the price.
A nation ends a tariff on bananas, which is an imported product. What will
be the effect on banana prices within that nation?
Correct Answer -The price will match the global market price.
5 stages of product life cycle
Correct Answer -product development, introduction, growth, maturity,
decline
At what stage of the product life cycle do sales generally grow at a slow rate?
Correct Answer -Maturity Stage: The maturity stage of the product life cycle
shows that sales will eventually peak and then slow down. During this stage,
sales growth has started to slow down, and the product has already reached
widespread acceptance in the market, in relative terms.
, At what stage of the product life cycle is the goal to remain profitable and
decide whether to keep or phase out the product?
Correct Answer -Decline stage.
Equity base
Correct Answer -Joint Venture, Wholly owned subsidies, and acquisitions
Which order of entry mode below is ordered from low to high risk?
Correct Answer -Export-import (lowest risk), licensing, franchising, strategic
alliance, international joint venture, merger and acquisition, wholly owned
subsidiary (highest risk).
Infant industry argument
Correct Answer -New industries in developing countries must be
temporarily protected by the government from international competition to
help them reach a position where they can compete on world markets with
the firms of developed nations.
Protectionism
Correct Answer -The practice of shielding one or more industries within a
country's economy from foreign competition through the use of tariffs or
quotas.
If a US citizens lives in the US but works in Canada does the GNP/GDP go to
Canada or US?
Correct Answer -Canadas GDP but US GNP, because GDP is where
QUESTIONS AND ANSWERS WESTERN
GOVERNORS UNIVERSITY.
What are two supportive pillars for an informal institution?
Correct Answer -Cognitive and normative
What are two supportive pillars for a formal institution?
Correct Answer -Coercive and regulatory
Which condition applies when a competitive firm decides to temporarily
shut down?
Correct Answer -Average variable costs are above the price.
A nation ends a tariff on bananas, which is an imported product. What will
be the effect on banana prices within that nation?
Correct Answer -The price will match the global market price.
5 stages of product life cycle
Correct Answer -product development, introduction, growth, maturity,
decline
At what stage of the product life cycle do sales generally grow at a slow rate?
Correct Answer -Maturity Stage: The maturity stage of the product life cycle
shows that sales will eventually peak and then slow down. During this stage,
sales growth has started to slow down, and the product has already reached
widespread acceptance in the market, in relative terms.
, At what stage of the product life cycle is the goal to remain profitable and
decide whether to keep or phase out the product?
Correct Answer -Decline stage.
Equity base
Correct Answer -Joint Venture, Wholly owned subsidies, and acquisitions
Which order of entry mode below is ordered from low to high risk?
Correct Answer -Export-import (lowest risk), licensing, franchising, strategic
alliance, international joint venture, merger and acquisition, wholly owned
subsidiary (highest risk).
Infant industry argument
Correct Answer -New industries in developing countries must be
temporarily protected by the government from international competition to
help them reach a position where they can compete on world markets with
the firms of developed nations.
Protectionism
Correct Answer -The practice of shielding one or more industries within a
country's economy from foreign competition through the use of tariffs or
quotas.
If a US citizens lives in the US but works in Canada does the GNP/GDP go to
Canada or US?
Correct Answer -Canadas GDP but US GNP, because GDP is where
